Economic experts say Ghana must target specific Small and Medium-Sized Enterprises (SMEs) and agribusinesses with export value and a competitive advantage and support them with financial and material resources.
That, they said would contribute in making the economy resilient against inflationary shocks while creating sustainable employment, particularly for the youth and address the economic challenges currently facing the country.
They have also asked the Government to create the enabling environment that would support the growth and expansion of export oriented entrepreneurs and agribusinesses that had the potential to develop into large scale enterprises.
They asked the Government to also ensure that its flagship programmes, including the Planting for Food and Jobs (PFJ), One District-One Factory (1D1F), and YouStart initiative (yet to be implemented), were well coordinated and made export oriented.
Dr Patrick Asuming, and Dr Daniel Amateye Anim-Prempeh, both Economists, observed that the programmes were good on paper, but their implementation had not yielded the expected result on the economy, particularly, creation of sustainable jobs.
They said this in an interview with the Ghana News Agency in Accra regarding the current economic situation in the country.
Since the start of the year, Ghana has been experiencing inflationary challenges, such as rise in food commodities, fuel and transport fares, exchange rate and depreciation of the Cedi.
These have led to high cost of living and worsened the plight of individuals (especially workers who have seen no increase in salaries), as well as industry and traders, who have been seeing increment in their production and import cost.
Dr Asuming, who is a Senior Lecturer at the University of Ghana Business School, noted that all those happenings in the country, pointed to the fact that though there had been some growth in the economy it had not yielded the required outcome.
He said: “Although there’s been some growth in the economy, from 0.4 percent in 2020 to 5.4 in 2021, the growth has not been fast enough, and we’re not creating enough jobs…also, the public finances have deteriorated.”
He explained that to come out of the current economic hardship, there was the need to help small businesses grow at a faster pace, and boost agriculture and agribusinesses, which had the potential to create a lot of jobs.
“We should identify and target specific promising business enterprises that have the capacity to export and employ more people, because there are enough innovations around us (in agribusiness for example) that we can help scale up,” Dr Asuming said.
He also asked the Government to ensure that the general cost for doing business and other issues that prevented businesses from growing were addressed.
Dr Anim-Prempeh, said: “As much as on paper, the Government policies are very good, the lack of coordination and focus is what is preventing us to see the needed dividend from all these flagship programmes.”
He indicated Ghana had not reached the point private sector alone could be the engine of growth of the economy, as many of them were financially and technologically handicapped.
Therefore, the Government must provide the requisite support through deliberate policies that would make SMEs with the potential to grow and export to other countries to produce on large scale.
That would help create more sustainable jobs and put money in the pockets of people, which would in turn, minimise the impact of economic hardship facing the country.
He said: “There is need to revisit the manufacturing agenda and look at how we can beef up the 1D1F so that we don’t rely heavily on others for the kind of things that we need in this country.”
The Economist also indicated that the time had come for Ghana to drive investors into the cocoa and cashew sectors to add value to the produce, and support the farmers to have an all year round production.
The current economic hardship has been brought about by factors such as rising fuel prices, and its associated rising transport fares, depreciation of the Cedi against its major trading partners, and high production cost.
For example, Diesel, which sold at GHS7 per litre in January is now selling at GHS11.95 per litre (a 70.71 percentage increase), while the price of Petrol per litre of petrol that was GHS6.8, has increased to GHS9.85 (a 44 percentage increase).
Figures provided by the Ghana Statistical Service (GSS) showed that the year-on-year inflation rate for food and non-alcoholic beverages was 13.7 percent January for 2022. This has increased to 26.6 percent as of April 2022.
Also, the Consumer Price Index (CPI) showed that the Transport component of inflation in January that was 17.4 percent, has increased to 33.5 percent in April.
The Producer Price Inflation (PPI), which measures the average change over time in the selling prices received by domestic producers for the production of their goods and services, has increased from 15.6 percent in January to 31.2 percent in April.